21 July 2016
Dubai: "How likely am I to need insurance?" Most Dubai residents were probably thinking this as they watched a massive fire engulfed The Address Hotel in Downtown Dubai on New Year's Eve. For the residents of Sulafa Tower that question was answered on Wednesday when a blaze broke out in the Dubai Marina skyscraper and the surrounding area was evacuated.
While interest in purchasing home content insurance usually peaks after such incidents, especially as insurance brokers estimate that only about 5 percent of Dubai residents are covered in case of a fire in their home, despite some policies costing less than 1 dirham ($0.27) a day.
A 2015 survey on home insurance by Dubai-based financial comparison website Souqalmal.com
, carried out shortly after The Torch tower fire in Dubai Marina in February 2015, found 67 percent of respondents said they still would not consider taking home insurance cover, despite all the coverage the incident generated around the world.
A further 45 percent of respondents said they did not consider home insurance a priority, while 34 percent of respondents said they were unsure how to get home insurance, showing the lack of awareness among Dubai tenants.
Ambareen Musa, founder and chief executive officer of Souqalmal.com
, has given advice to those still weary of purchasing insurance and starts by explaining the different types.
Types of cover
"Home insurance plans can mainly be divided into three categories - personal belongings insurance, content insurance (also known as home content or home content insurance) and building insurance," Musa told Zawya in an email interview.
Personal belongings insurance will only cover items such as jewelry, watches and mobile phones against loss or damage even when taken out of the house. Contents insurance will cover existing furniture and other household goods against loss or damage while they are present in your household. Lastly, buildings insurance is the responsibility of the homeowner and covers the cost of repairing or rebuilding the physical property.
The cost of an insurance plan varies depending on the company and type of plan, which is why people are advised to compare policies from different providers before making a final choice.Insurance companies in the UAE generally offer a 'New for old replacement' cover, which means items will be replaced based on the value they were when purchased. Depending on the policy, most insurance companies also provide short-term accommodation or money to compensate rent fees.
Policy check list
"Considering the rise in fire incidents in the country, it's important to not take home insurance for granted. Compare the different home insurance policies available and find out exactly what is covered. Pick a policy based on your needs," she said.
Choosing an insurance plan to match your needs can feel like a long and daunting process, which is why Musa has provided tips for those looking to invest. Firstly, check the 'excess' listed on the policy, which is the amount of the claim that you will be paying out of your pocket. Increasing this can reduce your premium, or vice versa. You should also check if you are eligible for a discount if you also have car insurance with the same provider and check if your insurance provider offers a no claims discount as part of the package, Musa added.
© Zawya 2016